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{BE: The notion that capital markets could self-regulate was decisively rejected.}

Perhaps, but a child, then seven years old, by the name of Alan Greenspan was clearly not attentive to what was happening.

Some years later, having read books by an Ayn Rand, it seems he came to that very idea cited in the caption above. And would insist upon the notion later as head of the Fed until the very end of his tenure ... as the banking sector fell into a deep dark hole in the fall of 2008.

And to this day, he claims "Nobody saw it coming!" Well he should have, shouldn't he? After all, he was in the catbird seat at the time the dark abyss was opening its giant maw.

Meaning what? Meaning this, paraphrasing an American philosopher by the name of George Santayana, "Those who refuse to learn from the mistakes of history are condemned to repeat them."

Re the U.S. practice of having a banker as Treasury Secretary, if a banker were appointed to the equivalent position in the U.K., there’d be riots. Americans don’t realize how totally and completely they’ve been suckered.

One would be particularly attracted to Dr. Reddy’s Per Jacobsson Lecture where he had mentioned the reasons behind the public perception of a comprehensive regulatory capture, which is what the essence of the article ‘Why no Glass- Steagall II’ is. The five reasons for this as cited by Reddy is as follows:

1. The financial sector has demonstrated disproportionate gains and have shifted the pains of adjustment to the rest of the population
2. The minimum fiduciary responsibility have been found to be missed as in Libor fixing or wrong credit rating of firms that were about to be bailed out later
3. The details of malfeasance and the losses incurred by the general investors were never transparently known throughout the crisis
4. Compensation of senior management in the financial sector as compared to the same in the the rest of the economy
5. Much needed credit is always elusive to the real needs of the economy

An alternative explanation could be that Wall St had not captured the executive and legislature of Washington DC as thoroughly in 1930s as they have in the 2000s and 2010s. The surprise is not that the Dodd-Frank Act is a watered down version of the Glass-Steagall Act, the surprise is that the Dodd-Frank Act got passed at all.